One of the legendary technology relationships is hitting a bump in the road. Like in many existing marriages it starts with poor communications.  Usually by poor communications we mean silence.  Things are not being spoken.  Then when spoken it comes as a surprise to one party or both.  That has been the case of late between two of the industries legendary companies: Intel and Microsoft.  For so many years the term Wintel has been synonymous with the PC industry. If you bought a desktop it would simply come with the Windows operating system and the microprocessor would be a Intel x86 chip.  With each new release of Windows Bill Gates would meet with Andy Grove to talk about the future of computing and what type of power he could expect with next microprocessor.  How could Microsoft software best leverage increased processor capabilities.

But over the course of the past few years that relationship has started to become a bit fractured. One of the big shifts in the industry over the past decade has been the increasing fast paced move to mobile devices.  Today this comes in two primary flavors: Smartphones and Tablets.  The shift to the mobile revolution has happened quickly led by Apple Computers and followed by others.  We have lot’s of choices we as consumers can make.  Do I want to go down the Apple path?  What about Google?  Amazon Kindle Fire?  A Nook anyone?  With choice comes competition and the rules of ninety percent market share are being changed.  With that partnerships are being challenged.  What was once cozy and friendly is being cooled over with thin sheets of ice.  It is dangerous in the world of business to get comfortable.  Comfort is usually something that happens with time and understandably or not, Microsoft and Intel got too comfortable. Microsoft recently has seen the wedge driven by Apple and in particular the iPad.  The iPad’s power management and instant boot capabilities really changed consumer expectations in how a PC should work.  the idea of instant on has been around for a long time.  I remember in the days of running WindowsNT at Microsoft the pain of booting up every morning.  It seemed like a five-minute process (I am pretty sure it was).  Not to mention the number of times I had to reboot during the course of the week.  I am sure over the course of a year a day or two of productivity was lost just due to the Windows boot process.  Then along comes the iPad and with the touch of a button and a swipe of a finger I am on the internet.  How?  Well it is interesting in the Steve Jobs biography that originally he was going to build the iPad with a Intel based micro processor.  He viewed the partnership Apple had developed with Intel since moving off the Motorola chip as important and working well. However some smart people at Apple said we can get a lot better performance if we go with a RISC based  chip versus the Intel CISC based chip.  The power management capabilities and over all performance trumped the partnership.  Apple had the right idea, in the end customer experience outweighs all. The success of the iPad and creation on a new market, the tablet space, created disruption in the industry.  However you define it, make no question that many people postponed a laptop purchase and decided to buy a tablet.  Thus requiring no Microsoft software and no Intel chip. The result has been both companies pursuing  individual market opportunities.  Intel has sought out Google to try to forge a closer relationship to support Android based tablet devices and pursue the other larger player in the tablet pie.  Microsoft announced over a year ago its pursuit of supporting and later creating a tablet based on ARM (RISC based chip).  As PC and Laptop growth slows it will be vitally important for each company to have a play in the mobile market place.

In fairness to both companies it is a testament to their legendary status in the industry that the relationship has been so harmonious for so long.  Over two decades.  In any industry to have such a long-lasting relationship that has been both cordial and successful is quite amazing.  However in technology things move quick and to get too comfortable with the future is to be the surest path to making certain your demise.  In this regard both Microsoft and Intel are guilty.  I have felt for a long time that both companies felt in the computing industry that they felt the hub of all technology experiences would be the PC.  In the age of the internet where everything is being decentralized and it is being distributed across he network , keep in mind it knows no boundaries.  That includes our homes and businesses.  Our homes have wireless networks distributed between desktops, laptops, tablets and smartphones.  The future will only bring more devices.  Where I once could say 100% of my internet time is on the PC, in a distributed environment the number continues to shrink.  That is why smartphones and tablets are disruptive technologies.  It is also why Intel and Microsoft are dimming stars gradually fading and reaching out to grab a last strand of light that once was.

Good Night and Good Luck

Hans Henrik Hoffmann October 11, 2012